U.S. Fed keeps interest rates unchanged as market expects

U.S. Federal Reserve on Wednesday kept the interest rates unchanged, in line with market expectation, while expressing confidence that inflation is near its 2-percent target.

"The (Federal Open Market) Committee decided to maintain the target range for the federal funds rate at 1.5 to 1.75 percent," said the Fed in a statement after concluding a two-day policy meeting on Wednesday.

The statement showed the central bank's confidence over inflation, acknowledging that core inflation rate has moved close to the central bank's 2-percent target.

The price index for personal consumption expenditure (PCE), an inflation gauge preferred by the Fed, rose 2 percent from a year ago in March, the biggest increase since February 2017, according to the latest data from the Commerce Department.

Excluding the volatile food and energy prices, the core PCE price index rose 1.9 percent in March, also the largest increase since February 2017.

"Inflation on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term," said the Fed.

While in its statement for the previous meeting in March, the Fed expected the inflation will move up in coming months and to stabilize around the 2-percent target.